Happy holidays and welcome back to the Baekdal Plus newsletter. I hope you had a wonderful Christmas, if that is a thing for you. Today we are going to talk about the future of media in 2023 + some of my concerns as a media analyst about the future of advertising.
This is also the final newsletter of 2022 before we move into the next year, and for me it's the start of a new chapter. No, I don't mean I'm changing jobs or anything. I'm still doing Baekdal Plus (I don't plan to ever stop doing that). But, I have just finished moving to a new place, so 2023 is kind of a new start.
For me this is chapter 8.
Chapter 1 was my early childhood, where I mostly just remember a gigantic dog, much bigger than me, and a cat. Chapter 2 was school years, where I moved between four different schools, which kind of made me the 'outsider'. Chapter 3 was deciding my career, which I thought would be some kind of business degree, so I went to business school. Chapter 4 was fashion. I realized that I wanted to be a fashion designer, so I moved away from my family and went to fashion design school.
Chapter 5 was when I was offered a job working for a startup that helped fashion companies become digital, and for two and a half years, I did just that. I would travel around to fashion companies, teaching them how to move from pen and paper and into a digital fashion workflow ... using drawing tablets, graphics programs, texture files, etc.
Chapter 6 was when I realized that I was much more interested in the media part of this, so I moved away from fashion design and instead got a job at a very big fashion company being responsible for all their digital media/marketing (which back in the 2000s was a very new thing).
Chapter 7 was when I, in 2010, decided to move entirely into the world of media. My old job had run out of steam, and I realized that many of the problems and questions that publishers had about moving to digital were exactly the kind of thing I had worked with since the late 1990s. Sure, journalism and fashion are not the same (although there are many similarities), but I had more than a decade of experience creating digital transformations, and I knew how online publishing worked.
So, I started Baekdal Plus.
Today, 12 years later, my company is still going. I never managed to get rich doing this. But it has become a stable business, and over the years I have worked with so many publishers, and Baekdal Plus now has subscribers from a very wide range of publishing houses and media individuals.
But, in 2023 chapter 8 starts. The work is the same. I'm still writing, and I'm still doing media analysis. But, after having lived with basically chronic stress for a decade (long story), I have moved away from the bad apartment in the middle of the city where I lived before, and I have instead rented a house in one of the most beautiful areas in the country. And, it's right next to the forest.
This picture is from the other side of my (small) garden.
And so, while chapters 3-7 were all about changes in my career, chapter 8 is about changing my quality of life, and I'm quite looking forward to this. It's not perfect (nothing ever is). I had tried to buy a house (twice), but that didn't work out. But this is still much better than before.
And so, I have a very positive outlook for 2023. Not just personally, but also professionally. We are moving into a new era of publishing, and while there are many obstacles and concerns to overcome, the future is looking very bright.
Let me explain why (from a professional media perspective).
If we think about the eras of media we have been going through, it is basically this:
These are all the steps we have been going through so far, and many of them have been very painful for publishers, to the point where many are no longer with us (very sad, but that's business). But it's an incredibly positive transformation. Think about how much we have accomplished so far. Think about how much we have changed and in how short a time (even though at the moment it was happening, it felt like forever).
But think about the next step.
Well, we have some very big problems, and some even bigger opportunities ahead of us.
Let's start with a big problem... which is advertising.
The advertising market is going through a very tumultuous period. Not just for publishers, but for everyone. Right now we have a lot of financial concerns due to world events, but that's temporary. But we also see a huge shift in all the elements around advertising.
The public's perception of online advertising and its value has changed dramatically, the politicians are no longer on the side of the industry, and all the ad tech companies are trying to come up with new models where they basically control everything forever.
This has a disastrous outlook for publishers, but it also opens up a window for us to define a new model.
This whole trend is quite complicated, so in order to explain it better, I have written a separate article just about this. So take a look at: "Advertising ... 10 years from now".
The next big trend is about social media, where it's critical that we focus on how to do things now that social media is not what it used to be.
What am I talking about? Well, think about what social media has become. In 2011, it was like this:
Social media was a massive driver of news distribution, and it dominated our focus. And it was where we tried to get people to go.
Today, two things have happened. First, as the media platforms have realized that news is not driving positive social interactions, pretty much all the social channels have become a place where news is minimized. Secondly, algorithmic changes now favor other types of interaction, or in the case of TikTok, creating an entirely new platform where the main focus is "entertainment".
This is important. TikTok did not become popular because it tried to be a social channel where people could share news. Instead, TikTok became popular because it's not a social channel at all. It's an entertainment channel.
And as this change has evolved, the social channels have gradually dropped their partnership with the news, simply because that's not what their audience wants, nor do they make any real money from it (despite what some in the media claim).
This, however, is a good thing. Social media never really benefited us. Sure, we got some traffic, but that traffic came at the cost of an erosion of loyalty, low-quality and low-converting traffic, and a journalistic focus that made our direct traffic perform worse as well.
We can see this clearly in the studies about news consumption. The countries with the highest level of social news consumption are also the countries where newspapers often perform the worst.
And, in comparison, look at Norway. Not only are they leading the market for the number of people who pay for news (41% pay for online news in Norway), but when asked what channels they think are the most important, we see that direct traffic to the regular news sites absolutely dominates. Facebook is only 32%, and other social networks are at 16%.
Even more so, if we only look at Facebook, we see that it has been in continual decline. In 2018, 40% of the Norwegian public said that Facebook was an important channel for news, which has now dropped to only 32% in 2021.
So, the combination of Facebook giving up on news, and the very clear data that newspapers benefit when they focus on direct distribution shows us how to think about this in the future.
This is a very important trend. In 2023, we are starting the beyond-social era, a new decade for news where we have defined our focus and strategies without social channels being an element of that.
Now, don't get me wrong. I'm not saying that social channels will go away (well, Twitter might, but that's a different story). But the relationship between social channels and the news has fundamentally shifted. Not just from a partnership perspective, but from a usage and audience perspective too.
So what does this mean for us? Well...
There is a question I get a lot these days from publishers. The question is "what's next?" ... meaning, what is next now that we have focused on subscriptions, optimized for it, and managed our churn? And what is next now that social media channels no longer send thousands (if not millions) of random views to us each day?
Or to put it another way, many publishers who have spent the past five years getting subscriptions to work are starting to see their performance level out. There is only so much you can do. And now that the social traffic is much less useful, there is no more traffic to get.
So what do we do now?
Well, we focus on what it is that we offer to people: The product of journalism.
This is really the key for the next 10 years. We will still have more optimizations to do, more subscription models to define, and all those other things. But the next thing for publishers, after this period of 'social', is to really start to think long and hard about what our journalism means to people, the value they get from it, the shortcomings to fix, and so much more.
And there is a ton of work to be done. In January, I'm coming out with an article addressing why people don't connect with climate coverage, where I'm going to talk about these issues.
But this is a perfect example of the things that will define the next era of news. It's about how we change what we do for people so that we can reach the people who don't feel news is useful for them.
So have a happy new year and see you in 2023!
If you haven't seen them already, don't miss out on the 'known to work' series, where I talk about the things we know work for publishers.
Also, remember that while this newsletter is free for anyone to read, it's paid for by my subscribers to Baekdal Plus. So if you want to support this type of analysis and advice, subscribe to Baekdal Plus, which will also give you access to all my Plus reports (more than 300), and all the new ones (about 25 reports per year).
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Founder, media analyst, author, and publisher. Follow on Twitter
"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé